Managing Denials After ICD-10

Healthcare providers can expect an increase in medical claim denials after Oct. 1, 2015. But that doesn’t have to mean that revenue will be lost.

The Centers for Medicare and Medicaid Services (CMS) predicts denials could increase from 100 percent to 200 percent and lengthen accounts receivable cycles an extra 40 percent.

The easy answer is to stockpile savings or get a line of credit, so your facility can last a couple months without reimbursements. But how much sense does that make for smaller organizations?

Sounds like this problem is going to require attention and investment.

Indeed, managing claim denials after Oct. 1 will require more than a summary response from medical coders — especially if the denials call the medical necessity of procedures into question. Then physicians will need to spend time justifying the reimbursements. This is going to be the kind of query that bogs down productivity even more than documenting the encounter.

End-to-end testing will be vital. It’s a chance to identify problems and solve them before they hinder reimbursements.

Healthcare providers will need a denials manager who can track denials and communicate with healthcare payers. This is where early communication with payers becomes an investment. If staff have a contact person now, it’s more likely they can reach someone who can deal with denials after Oct. 1.

Denials managers need to be able to grasp the medical billing process and medical concepts. They need to understand why claims are denied so they can help correct deficiencies in clinical documentation or medical coding accuracy.

End-to-end testing will be vital. It’s a chance to identify problems and solve them before they hinder reimbursements. Testing will reduce surprises after Oct. 1.

There also must be an effort to discover trends in denials. Discerning trends can help healthcare providers understand how to submit medical claims properly. This is also why it’s a good time to track denials and rejections.

Tracking helps you determine if there is an ongoing problem. At the very least, this is what you must track:

• Days in accounts receivable by healthcare payer
• Denial rates
• Amount of reimbursements denied
• If reimbursements match the contracted rates

As with productivity, providers need to know what’s “normal,” and they need to know now. If you wait until Oct. 1, 2015, you won’t know if your data reveal problems, or business as usual. And remember, crunch your numbers weekly to keep small problems from becoming big ones at the end of the month.

And if you’re lucky, tracking these metrics will reveal problems unrelated to ICD-10 coding that you can solve sooner than later.

ICD-10 denial management starts now. Providers must understand what currently triggers denials and what could cause problems with ICD-10 claims. Do it right, and you may help prevent crippling reimbursement delays.

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